November 27, 2019

The Psychology Of Luxury Car Buyers: 7 Considerations

Julia Manoukian

The luxury car market accounts for 6 percent of automobile sales in the United States, resulting in a small but highly lucrative segment. Companies looking to increase their luxury vehicle sales at auto shows need to understand the factors that drive luxury car buyers in this sector. This information gives live marketers the insight they need to create customized messaging capable of converting luxury buyers.

Perceived Value

Luxury brands have a higher perceived value compared to other companies. Consumers are willing to pay higher prices for a vehicle when they feel that the price reflects the value that they're getting in return. Some luxury vehicles are functionally identical to lower-priced models, but the details and the way the car is positioned makes the difference.

Effective marketing can elevate a vehicle brand's perceived value and make it more desirable for luxury buyers looking to maximize their investment in an automobile purchase.

Status Symbol

A luxury car can act as a status symbol for the buyer. Companies that want to convey they are successful may have employees drive around in luxury vehicles when they visit client sites. A common story surrounding luxury vehicle purchasing is the mid-life crisis. The customer wants a new, high-class car to represent a change of pace in their life or to show that they've reached a personal milestone.

According to a study published in The Journal of Marketing, there are two different types of motivations that drive consumers to purchase goods, including vehicles. These two motivations are hedonic and utilitarian. Whereas utilitarian motivations are more focused on positioning the consumer as smart and responsible, hedonic motivations are more focused on self-promotion, and elevating them to a higher class on the social scale.

Thus, those who buy luxury cars more more likely crave social status and material wealth, as opposed to utilitarian cars which consumers buy out of necessity.

The luxury car company needs to maintain their brand reputation and quality to attract these customers. They pay close attention to how people react to the company and may stay away from vehicles that come from businesses that don't align with their personal or professional values.

Self-esteem

Some people gravitate towards luxury brands as a way to boost their self-esteem. This factor may crossover with other purchase influencers, such as wanting a status symbol to increase confidence. This phenomenon is called compensatory consumption. The action may occur due to psychological threats or negative life events that impact the person's ego.

The marketing messages for approaching this market segment should focus on the emotional impact of owning a luxury vehicle. When marketers can make this connection at an auto show, they can show the buyer that they're capable of fulfilling the customer's self-esteem goals.

Passion

Car enthusiasts love automobiles as part of their hobby, so they have a strong attachment to brands that offer unique experiences or top-level performance. They're not looking for a vehicle to get from point A to point B. Every part of the car contributes to the way they enjoy their free time, which means this type of buyer pays close attention to every aspect of a luxury car.

They are better-educated buyers, as they regularly consume automobile content in publications and online. Features that get overlooked by the typical customer end up front and center for the enthusiast.

"In recent years, the concept of luxury has expanded from materialism to time and passion, and become eventually more available. As consumers satisfy their feelings of pleasure and gratification through the luxury goods, the available luxury products will also continue to enhance its charm for consumers."

Auto show marketers should also be aware that this customer demographic may share detailed information about the entire purchase experience with their social circles or on enthusiast forums.

Consumer Experience

"Luxury" covers more than the quality of the end product. It also sets an expectation that the consumer experience will be elevated compared to purchasing from another automobile company.

According to Autotrader, the majority of consumers (54%) said they would buy from a dealership that provides a superior experience over one with the lowest price.

Marketers need to consider every customer touchpoint in the process and ensure that it meets or exceeds the assumptions that the buyer brings to the table. Some ways that luxury car brands can convey this at an auto show include having enough staff to offer one-on-one attention, providing value-added perks to the booth and delivering a personalized experience that they can't get anywhere else.

Build Quality

Some luxury car brands simply have a better build quality than their competitors. The premium prices for the vehicles make it possible for the company to use high-end finishes, better quality materials and innovative features.

Rolls-Royce, for example, has maintained a reputation for over 108 years for its excellence in engineering and quiet motoring. And consumers pay the price—luxury buyers will be hard pressed to find a model under $200,000.

The Bentley Mulsanne is the most luxurious vehicle Bentley can build. According to roadandtrack.com, "The $300,000-plus Mulsanne is the most luxurious vehicle Bentley can build. The rear seats are inspired by first-class cabins in airplanes, and the options available are limited only by your imagination—and your budget."

When the buyer wants to have the best-in-class vehicle, they know to look for luxury brands that deliver all of the bells and whistles.

Exclusivity

The luxury car market has a high barrier to entry for the average consumer, which makes it an exclusive club that not everyone can join. Some car owners end up being the only person with that particular model in their city or region, which can give them a level of local fame that's personally desirable.

One way to reinforce this factor at an auto show is to talk about the limited number of vehicles released by the brand in a year. The small numbers would be a negative for a budget car brand, but it ends up adding to the value and desirability of the luxury brand.

People lust after products they can't have, and this buyer enjoys evoking these feelings when they have part of a limited run. They could also end up maintaining the value of their investment if they know that no other cars get produced after the initial manufacturing period.

Optimizing a marketing strategy for luxury cars at an auto show requires a deep understanding of the target audience and what drives them to look for these cars. Leverage these triggers to move buyers along their journey and increase the chances of attracting qualified leads interested in moving forward.